Price
Price is never the real issue for prospects. The real issue is that they may not believe you are worth the price. The reality is that many times your product and service isn’t worth the price. Not because it doesn’t justify itself, but because your prospect doesn’t value it. So instead of constantly fighting price, focus your time positioning your product with prospects who are aligned with you price point or your value proposition.
Let’s first take a look at the most important contribution as to why salespeople get caught up in the price game themselves. Salespeople are their own worst enemy. Without question, salespeople pin themselves into a corner with their hard-won attitudes, beliefs, and personal buying habits that don’t support them selling value.
Personal Buying Habits
The way you buy is the way you’ll sell. If you are a price shopper, you will disproportionately attract price shoppers. Birds of a feather flock together, like attracts like. The best way to change your own selling habits is by modifying your own buying habits. Performance value shoppers tend to attract higher-end buyers. By becoming a quality value shopper you will begin to naturally assume a different selling posture that will draw like-minded prospects.
Selling Habits and Buying Habits
The following are leading contributors that will virtually guarantee price resistance:
Feature and Benefit Selling: This archaic, antiquated and still popular method of selling will quickly commoditize your value proposition and marginalize your selling position. The irony of feature and benefit selling is what it works so hard to prevent it actually creates. In the absence of the perception of value, every negotiation will degenerate to price.
Lack of Finding Pain: The more pain a prospect has, the more they are willing to pay to get rid of their pain. Salespeople who sell from the position of gain, advantage, and opportunity will consistently attract price resistance. The more you are creating pain, the less the prospect is concerned with price. When they are too busy negotiating an answer to their problem or understanding their problem, prospects aren’t as predisposed to spend a lot of time negotiating on price.
Selling Price: 80% of salespeople use price as a competitive weapon. Prospects rate price on a scale of 1 to 10 as a 2.5 and salespeople rate it as 8.0. Most salespeople aren’t aware that the opening price gambits by prospects are always just a ploy. 95% of all purchase decisions are made on a non-price basis. On most surveys, price is generally the fourth or fifth consideration.
Lack of Self Esteem and Confidence: It really isn’t so much believing in your product, as it is believing in yourself. Self-esteem and belief in your product or service generally go in tandem.
Needs based Selling: People don’t buy what they need, they buy what they want. Needs based selling (understanding their specifications, applications, and requirements) marginalizes and commoditizes your offering because people rarely pay a premium for what they need. They always will pay a premium for what they want. This is a classic Chevrolet versus BMW motivation. Most of us need a car (Chevrolet) but want a BMW.
Lack of a Healthy Pipeline: Salespeople who sell out of desperation generally have a poor pipeline of prospects. Consistent prospecting can help you arm yourself to be more effective in price battles.
Need for Approval: Salespeople with a high need for approval will tend to find themselves vulnerable to price shoppers. Their need to be liked, validated or to avoid healthy confrontation will generally supersede their need to sell healthy margins.
Selling at the Wrong Level: The higher up the food chain you sell, the less likely price will be a dominant factor. Most senior level people, unlike purchasing agents, don’t have the time or the inclination to do comparison shopping, because their mandate is more about growth, vision and profit.
The following are specific tactics, scripts, and verbiage to deal with price shoppers:
- “I understand price is an important factor for you, and it should be. As you can imagine, we offer a full range of prices, dependent on many variables. At this stage, I’m not sure what is right for you. Can we first establish what you need and why you need it? Then I’ll be more than happy to give you the price right down to the penny.”
- “You say you can’t afford it. I certainly can appreciate that. This isn’t right for everyone. What, if anything, will you accept as proof that you can afford it?”
- “My product is one of the more premium services around… is that a reason for us to stop talking?”
- “The good news is, I can help you solve your problem. The bad news is, it will cost more than you anticipated.”
- “When you say our price is high, is that a good thing or a bad thing?”
- “When you say it is high, specifically what did you mean by that?”
- “You must have found a comparable product with high quality and service for less.”
- “You would like me to reduce my fee by 20%; what part of our service are you willing to have left out?”
- “I’m going to ask you a tough question, and I hope you can appreciate why I’m asking this: Are you the least expensive company in town?”
- “Our customers basically fall into three categories. There are those fortunate few who elect to invest $300,00 on a long-term project. Then there are those who invest $200,000 for a medium-sized project; and then, those who invest $50,000 for a kickoff engagement to test the waters. Which best fits you?”
- “Let me ask you a silly question. What if it were free? Then price isn’t the real issue.”
- “The common law of business prohibits paying a little and getting a lot.”
- “Good things are seldom cheap. And cheap things are seldom good.”
- “We are a little less than a lot and more than a little, is how our customers would typify us.”
- “Are you concerned with price or total cost?”
- “Could you ever see yourself paying more for something you could get for less?”
- “Sometimes our product is expensive and it is a good deal, and sometimes it is expensive and it isn’t a good deal. Let’s see which is the case for you.”
- “Would it ever be of concern that you paid less on the front end and more on the back end?”
- “Is price your only concern?”
- “In order to give you a meaningful price, could I first ask you a couple of questions? Because at this stage, we aren’t worth any price.”
- “It is very expensive if it doesn’t work or if we aren’t a good fit for you. Let’s see if we are first a good fit.”
- “Everyone is in a tight mode. Is this going to break the bank for you?”
- “Your company doesn’t have deep pockets and short fingers, does it?”
- “If you can get it for less, then you should. You’d be fiscally irresponsible if you didn’t. If I were in your shoes, I’d do the same. However, the only way you could possibly get burned is if you were not comparing apples to apples. Are you open to discussing that?”
- “I know price is important to you. So we can compare all variables, do you mind sharing with me what you are comparing us with, in concluding our price is high?”
- “Mr. Prospect, how are you evaluated and what will you be remembered for two years from now? That you got a good low price on the front end or that the project was a big success because you didn’t cut any corners and you covered all your bases? A lower price just lowers your risk on price but not on quality.”
- “Let’s assume, all things being equal, even price, who are you most confident with at this stage?”
- “Are you concerned with price or cost? Price is the initial acquisition cost. Cost is the total ownership cost. It includes all the things after you’ve acquired the product. Are you open to discussing that to make a better comparison?”
- “I’m curious, how do you mean ‘it costs too much‘? Compared to what?”
- “Why do you feel you can’t pay this price? I’d like to understand if I can.”
- “If you think our prices are high, just wait until you see what it costs you when it is cheaper. Unless entry cost is your only concern?”
- “Let’s assume price wasn’t an issue for you. What else is holding you back?”
- “With all due respect, we are looking for customers who value getting more and therefore are willing to pay more, not people who can afford to pay less to get less.”
- “You can pay a little more now or potentially pay a lot more later.”
- “It’s not that you don’t have the money… it’s that you don’t believe it’s worth it. And we may not be. Are you open to exploring to see if it is worth it or not?”
- “Would you agree on a practical level a product or service is worth what it can do for you and not what you paid for it?”
- “We are expensive and it drives our competitors crazy.”
- “Why do you think anyone would pay more when they could get it for less?”
- “We aren’t a price house. We are never low bidders.”
- “The most expensive doctor in the world can be a cheap one.”
- “Do you think anyone has the money for this?”
- “When you say I’m expensive, is that a question or just an observation?”
- “If you leave it up to me, I have very expensive taste and I’ll recommend something that is very expensive. So can you share with me what you had in mind?”
- “Thank God our prices are high. And yet you are still talking with me. Why?”
- “Do you have any suspicions that easy money comes with a high price in this situation?”
- “When you say it is high, I’m assuming you will share with me if it is justified or not from your perspective?”
- “The price will be in direct proportion to how small or big your perceived problems are.”
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